Results
Q4 of 2011/12 andFiscal Year 2011/12
Media & Analyst Conference
Zurich, 6 June 2012

Agenda1. LEM at a Glance

François Gabella

2. Highlights and Business Review

François Gabella

3. Financial Review

Julius Renk

4. Strategy and Outlook

François Gabella

5. Proposals Shareholders’ Meeting

Felix Bagdasarjanz

2

1. About LEM■ LEM is the global market leader in providing innovative and high quality
solutions for measuring electrical parameters.
■ The current and voltage transducers are used in a broad range ofapplications in Industrial, Traction, Energy & Automation and Automotivemarkets.
■ LEM is a high growth global company with approximately 1’100 employees.
Production plants are in Geneva (Switzerland), Beijing (China) and Machida(Japan). Regional sales offices are close to the clients’ locations.
■ LEM (SIX: LEHN) has been listed on the SIX Swiss Exchange since 1986
and has a market cap of CHF 564 million per 31.3.2012.

3

1. LEM Applications: Robot To control the arm, power inverters drive amotor from one position to the next andstop precisely in position Accurate measurement of the current withtransducers needed to control the arm

A CASR
1 Control Unit
2 Inverter
3 Motor4

1. LEM Applications: Mobile Phone Base Station Transducers ensure stable power supply
and control in case of a failure Transducers used to control the charge
and discharge of power batteries forbackup

A HASS
B LTS
1 Antenna
2 Battery
3 Controller
4 Power supply

5

1. LEM Applications: Electric Plug-in Car
 Battery management
 Electric motor management
 Charger management

1 High-voltage battery
2 Vehicle control unit
3 Charger
A HAH1B DHABC HC5F
D CAB

4 Motor controller
5 Electric motor and transaxle
6 DC/DC converter
7 Electric power steering

61. LEM Applications: Plasma Cutting
 To maintain the arc continuously, current
transducer measures the current throughthe arc
 Accuracy of measurement is important toguarantee accuracy and shape of cut

A LAH
1 Electronic
2 Motor
3 Torch
3 XY-table71. LEM Production & Logistics World-Wide

Production Centers (PDCs)
Adaptation Centers
Sales Offices
Agents / Distributors
8

1. LEM at a Glance - Businesses
Industry segment
Drives & welding

Automotive segment
Conventional cars

■Motor drives■ Welding■ Miscellaneous■Renewable energies &power supplies

Green cars (HEV, EV)

Solar■ Wind■ UPS■ Battery monitoring, processcontrol, energy metering■Lead battery management■ Start/stop application

Battery pack management■ Electric motor control■Traction
On-board applications■ Trackside■ Energy monitoring■High precision
Medical scanner■ Test & measurement■92. Highlights and Business Review
François Gabella, CEO10

2. Highlights 2011/12
In CHF million, %2011/122011/12 vs. 2010/11

Q4 vs. Q3 2011/12

Orders182.9-45.7%

16.2%

Sales

236.3

-20.2%

1.6%

Operational EBIT

34.2

-43.4%

15.6%Net earnings

28.5-28.1%

38.2%■

Economic weakness adversely impacted LEM’s industry businesses withrenewables energies business affected most■Second-best result in LEM’s history after record year 2010/11■

Automotive businesses growing constantly■

Restructuring measures in order to adjust capacity■

Slow recovery in Q4 of 2011/12■

Continued investment in R&D and operational excellence112. Net Sales
In CHF millions

In CHF million, %

Sales

YoY

YoY

QoQ

at constantcurrencies

300275

Industry

208.3-23.6%-16.2%-0.9%

250

Automotive28.019.1%

34.3%

17.5%

225

Total sales

236.3-20.2%-12.2%

1.6%

200
175

■

150
125

■

100■

75■

50

Second highest sales in LEM
history after record 2010/11
Industry business slowed down
Strong performance of automotive
businesses
Strong currency impact

25
0
07/08

08/09

09/10

10/11

11/12
12

2. Quarterly View
In CHF millions

Book‐to‐bill ratio

100

1.4

90
1.2
80

75.0

67.7

66.8

70
58.4

60

1.0
57.9

55.0

55.7 0.8

48.3

50
40

77.0 77.4

43.2■ Slow recovery of bookings:
Q4 of 2011/12 book-to-billratio 0.99
■ Customers’ inventory
corrections ended in Q4 of
2011/120.635.6300.4200.2100■ Cancellations of orders
received of CHF 10.5 million
in Q1 and CHF 14.0 million
in Q2 of 2011/120.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q409/10 09/10 09/10 09/10 10/11 10/11 10/11 10/11 11/12 11/12 11/12 11/12
Orders received

Sales

Book-to-bill ratio
13

2. Cost and Capacity Management UpdateOn 22 September 2011 LEM announced a step-up of cost reductionmeasures
 Reduction of worldwide headcount to below 1’100 employees
 Continued transfer of production lines to China
 Strict cost control
Successful cost management
 Restructuring cost of CHF 0.7 million recorded in Q2 of 2011/12
 Sales, general & administrative expenses (SG&A) declined by 5.4%
compared to 2010/11
Continued investment in LEM’s future Increased focus on R&D, operational excellence and efficiency

14

2. Industry Segment: Regional Markets
EuropeIn CHF million, %

Sales

YoY

QoQEurope

107.3-26.6%

19.4%

N. America

27.6-9.1%-1.0%

Asia68.5-24.7%-23.9%

ROW

4.9-4.7%-42.3%

Total

208.3

-23.6%-0.9%

North America
Asia
Rest of the World

2%

33%

52%


13%

Intensified competition with newcapacities and broadened productportfolios
LEM launched important newproducts
15

2. Industrial Segment: Business Development
In CHF millions

Op. EBIT in % of sales
25280

20240

200
15160

120

1080
540

00
07/08

08/09

09/10

10/11

11/12

Businesses and Applications
Drives & welding Weak demand and continued inventory
corrections of customers in Europe andAsia in H1 2011/12
 Stabilization since Q4 of 2011/12
Renewable energies & power supplies
 Most volatile business Normalization of customers’ inventories
and restart of bookings in Q4 of 2011/12
Traction Delays of major projects in China
 Partial compensation with trackside
project in UK
High precision
 Increased market share in the medicalmarket
16

2. Automotive Segment: Regional Markets
EuropeIn CHF million, %

Sales

YoY

QoQEurope

2.7

-8.9%

39.9%

N. America

14.5

14.4%

10.6%

Asia andROW

10.9

36.8%

21.7%

Total

28.0

19.1%

17.5%

North America
Asia and Rest of World9%39%

52%

Global car industry performed well in
2011/12 with more focus on energy
efficiency
Increased price competition due tomore “me-too” products
Signed new contracts in all regions17

2. Automotive Segment: Business Development
In CHF millions

Op. EBIT in % of sales

30

25

25

20

20

15

Businesses and Applications
Conventional cars
 Increased sales with key customers
 Won new contracts in Asia and NorthAmerica
 New start/stop application attractive
addition to the product range

15
10
10
5
500
07/08
-508/09

09/10

10/11

Green cars (HEV, EV) Positive trend due to market growth Growth above 50%
 Majority of all green car platforms
planned or in production today
equipped with LEM products

11/12-5-10-10-15-1518

2. Business Development Automotive MarketApplication

In volume

Added platforms
2011/2012

Added platforms
2012/2013

USABMxQ3

Q1 + Q3

USABM

USA

Green Carx

Q3

EuropeBMx

Q3

EuropeGreen Carx

Q4

Q2Korea

Green Carx

Q2

Q2 + Q4

JapanBMJapan

BMJapan

Green Car

Q3 + Q4

China

Green Car

Q4

China

BM

New business> CHF 0.5 million

Q4
Q1Q4xx

BM:battery management
Green Car: electric vehicle + hybrid electric vehicle + fuel cells

Q2Q2Q2192. Business Development ChinaProductionSales■■

Market share of over 50%
Sales impacted by slowing activity
especially in solar, wind and traction■■

LEM China expands its #1 position aslargest manufacturing site of the Group(43.2% of total production, compared to37.5% in 2010/11)“Made by LEM” quality

In CHF millions

In CHF millions
60

120

50

100

40

80

30

60

20

40

102000
07/08

08/09

09/10

10/11

11/12

07/08

08/09

09/10

10/11

11/12
20

3. Financial Review
Julius Renk, CFO

21

3. Consolidated Balance Sheet
31.3.2011

31.3.2012

Cash and cash equivalents

27’231

21’121

Accounts receivable

60’02642’140Inventories

34’18726’605

Other current assets

3’027

4’965

Total non-current assets

37’50837’683

Total assets

161’979

132’514

Accounts payable

29’617

17’863

Other current liabilities

28’85029’774

Total non-current liabilities

6’599

5’316

Equity96’91379’561

Total liability and equity

161’979

132’514

13.3%

12.3%

5.05.3

 Equity ratio

59.8%

60.0%

 Net financial assets

26’613

18’121

In CHF thousands

 Avg. net working capital in % sales
 Inventory turns

22

3. Income Statement
Q4
2011/12

Change54’98055’844

1.6%-1.8%pt

41.0%

37.0%

-4.0%pt-62’315-5.4%-15’569-12’617-19.0%

60’41334’171-43.4%

6’946

8’030

15.6%

Additional SOP
income / costs-5’426315

N/A

17-322

N/A

EBIT

54’98734’486-37.3%

6’964

7’709

10.7%

Financial expense (net)-4’622-1’962-57.5%

290-1’090

N/A

Income tax-10’722-4’037-62.3%-1’603

1’189-174.2%

Net profit

39’64328’487-28.1%

5’651

7’808

38.2%

2010/112011/12

Change296’203236’634-20.2%

42.6

40.8%

Operating expenses-65’886

Operational EBIT

In CHF thousands,%

Sales
Gross margin

Q3
2011/1223

3. Results by Quarter
In CHF millions

In % of sales

10030%

90
75.0

80

66.8

70

25%
77.0 77.4
20%

67.7

58.4
48.3

60

■ Orders normalizing, sales
stabilizing

57.9

43.2

55.0 55.8 15%■ Improved operating EBIT margin
in Q4 of 2011/12 ; still below
target range

5035.610%

40305%■ High net profit in % of sales,
resulting from significantly
decreased tax charge

200%
100-5%Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
09/10 09/10 09/10 09/10 10/11 10/11 10/11 10/11 11/12 11/12 11/12 11/12

Orders received

Sales

Op. ROSNet Profit in % of sales

24

3. Gross Margin
In CHF millions

In % of sales
50%

140

Gross margin

2010/112011/12Q3
2011/12Q4
2011/12

126.3

96.5

22.5

20.6

42.6%

40.8%

41.0%

37.0%

in CHF million
48%12046%
100

Gross marginin % of sales

44%42%

80

40%
60

38%
36%

4034%20■ Negative impacts on gross margin:■ Foreign exchange effects■ Increased price pressure■ Lower absorption of fixed cost
■ Impairment of CHF 2.1 million in
renewables energies production
equipment in Q4 of 2011/12

32%
030%
07/08

08/09

09/10

10/11

11/12

25

3. Operating Expenses
In CHF millions

In % of sales
50%

90
80

Operatingexpenses

2010/112011/12Q3
2011/12Q4
2011/12

65.9

62.3

15.6

12.6

22.2%

26.4%

28.3%

22.6%

in CHF million
40%70

Operatingexpensesin % of sales

6030%
50
4020%
302010%■ Restructuring cost of CHF 0.7 million in Q2of 2011/12■ All savings targets more than achieved inQ4 of 2011/12■ Overall savings of 5.4% in 2011/12
compared to 2010/11

1000%
07/08

08/09

09/10

10/11

11/12

26

3. R&D Expenses
In CHF millions

In % of sales

2010/112011/12Q3
2011/12Q4
2011/12

14.0

13.0

3.4

2.6

4.7%

5.5%

6.2%

4.7%

12%

15R&D
expensesin CHF million

129%

R&D
expenses
in % of sales

96%■ R&D exempt from restructuring exercise■ R&D expense within long-term averageof 5.5%63%30%

007/08

08/09

09/10

10/11

11/12

27

3. Operational EBIT
In CHF millions

In % of sales

7024%

60

50

Operational
EBIT

22%

in CHF million

20%

OperationalEBIT

2010/112011/12Q3
2011/12Q4
2011/12

60.4

34.2

6.9

8.0

20.4%

14.5%

12.6%

14.4%

in % of sales
4018%

30

16%

■ Excluding additional SOP cost/income■ Exceptionally good profitability in 2010/11■ Lower sales impacted operational EBIT

2014%

1012%

010%
07/08

08/09

09/1010/1111/1228

3. Legacy SOP Programs Expired per 31.03.2012■■■■

Additional stock option plan cost/income amounted to CHF 0.3 million, directly
linked to the share price decrease from CHF 570 at 31 March 2011 to CHF
494.50 at 31 March 2012
With the closing of fiscal year 2011/12, all legacy stock option plans are closed
LEM will not record any additional stock option plan cost/income going forward
LEM has no further option based compensation programs# outstanding options

31.3.2008

31.3.200931.3.201031.3.2011

31.3.2012

70’45766’20740’794

4’952

0Closure ofSOP 5SOP 629

3. Financial Expense
In CHF thousands

Exchange effect*

2011/12Q3
2011/12Q4
2011/12-4’263-1’704359-1’028

-359

-258

-69

-62

-4’622-1’962290-1’0902010/11

Other financial expense &incomeTotal

 Q4 of 2011/12 exchange effect mainly driven by JPY (dividend), EUR, USD
 Foreign exchange hedging policy In general: 50% of net exposure on a rolling 3-9 month basis
 Euro: 100% of net exposure 12 months forward*

The line “exchange effect” in the financial result is mainly due to currency volatility during the time between booking andsettling a receivable/payable. Over and above this line, foreign exchange rates impact every P&L line through the rate at
which each transaction is booked and at which it is consolidated into CHF.

30

3. Income Taxes
In CHF thousands

2010/112011/12EBT

50’36532’524

Income taxes-10’722-4’037

Effective tax rate

21.3%

12.4%

 Strongly decreased tax rate from 34.9% in 2009/10 to 12.4% in 2011/12
 Expected tax rate decreased from 31.9% in 2009/10 to 17.8% in 2011/12
 Events in 2011/12:
 Japan withholding tax reduction
 High and New Technology Status in China

313. Income Taxes

2010/11 effective tax rate

Expectedtax rate

One-offitems

Total taxrate-20.8%-0.5%-21.3%

Japan withholding tax reduced for results covering prior years
Other adjustments in withholding tax for resultscovering prior years

+3.7%

+3.7%

+2.5%

+2.5%

China adjustment in prior period income tax

+0.5%

+0.5%

China adjustment in prior period deferred tax

-0.8%

-0.8%

China reduced current income tax (HNTE status)

+1.6%

+1.6%

Other expected tax rate impacts

+1.4%

+1.4%

Variation

+3.0%

+5.9%

+8.9%

2011/12 effective tax rate

-17.8%

5.4%-12.4%

32

3. Net Profit
CHF millions% of sales

4520%

Net profit
in CHF million

4018%

Net profit
in % of sales

3516%

2010/112011/12Q3
2011/12Q4
2011/12

39.6

28.5

5.7

7.8

13.4%

12.1%

10.3%

14.0%

‐5.4

‐4.6

30

2010/11
‐10.7

14%
60.4

25

39.6
12%

20

Operational EBIT SOP inc./cost
10%

FinancialexpenseIncome tax

Net profit

15

2011/128%106%

54%007/08

08/09

09/10

10/11

11/12

+0.3

‐2.0

‐4.0

34.2

OperationalEBIT

28.5

SOP inc./cost

FinancialexpenseIncome tax

Net profit
33

3. Cash Flow Statement
In CHF thousands

2010/112011/12

Profit before taxes

50’36532’524Non-cash items

1’133

2’892

Cash flow from changes in net working capital-21’452

11’238Cash flow from operating activities

30’04646’654

Cash flow from investing activities-9’383-9’120Free cash flow

20’66337’534

Cash flow from financing activities-23’209-45’922

Change in cash and cash equivalents-2’546-8’388Cash and cash equivalents at the end of the period

26’613

18’12134

3. Financial Highlights in 2011/12 - Summary
Strong balance sheet at 31 March 2012
■ Total assets CHF 132.5 million (CHF 162.0 million)■ Equity ratio 60% (unchanged)■ Net financial assets CHF 18.1 million (CHF 26.6 million)
Profitability slightly below target range■ In fiscal year 2011/12 operating expenses declined by 5.4%
■ Operating EBIT margin of 14.5% for fiscal year 2011/12
Strong cash generation■ Free cash flow CHF 37.5 million (CHF 20.7 million) for fiscal year
2011/1235

4. Strategy and Outlook
François Gabella, CEO36

4. Market Factors and Strategy■ We firmly believe in our strategic
direction and the 4 drivers for ourbusiness remain unchanged■ We will continue to capitalize on
the drivers of LEM’s markets
through pure play components company
 diversification across geographiesand markets

37

4. Strategic Priorities to Extend Leadership Position
Increase technology leadership■ Established multidisciplinary innovation team
■ R&D roadmap foresees increased number of product launches■ Improve performance of products in terms of precision and functionalities■ Dedicated team of experts to manage LEM’s IP
Increase efficiency■ Improve product cost through low cost sourcing and manufacturing■ Reduce complexity of organization
Increase production flexibility■ Improve supply chain management■ Develop systems to better forecast demand fluctuations38

4. Outlook■ We expect the economic climate to remain challenging and uncertainty topersist in LEM’s markets■ For 2012/13 we expect:■ progressive restart in the Industry segment■ growth in the Automotive segment■ increasing competitive pressure■ Our ambition is to deliver a result within the operational EBIT margin
target range of 15 to 20%

39

5. Proposals Shareholders’ Meeting
Felix Bagdasarjanz, Chairman of the Board

40

5. Proposals for the Shareholders’ Meeting
Dividend proposal■ Ordinary dividend of CHF 25 per share■ Payment corresponds to a payout ratio of 99.7%
Organizational structure■ Transfer seat of LEM Holding SA to Fribourg■ LEM becoming an increasingly global company with the majority ofits employees outside Switzerland■ Clarify roles between the sites providing R&D, manufacturing andsupport services to the Group and the Group management
represented by LEM Holding■ Established LEM Intellectual Property in Fribourg to reinforce
LEM’s global intellectual property strategy
41

Financial Calendar and Contact Details
Financial calendar
28 June 2012
4 July 2012
9 July 2012
7 August 2012
13 November 2012
14 February 2013
5 June 201327 June 2013
2 July 2013
5 July 2013

Ordinary shareholders’ meeting for the year 2011/12
Dividend ex-date
Dividend payment date
First quarter results of 2012/13
Half-year results of 2012/13
Third quarter results of 2012/13
Year-end results and media and analyst conference
Ordinary shareholders’ meeting for the year 2012/13
Dividend ex-date
Dividend payment date

For further information
Julius Renk, CFO
Tel: +41 22 706 12 50
Email: investor@lem.com

42